Category: Money

United Bank for Africa (UBA) Plc has facilitated $29.4 billion export trade finance for its customers across different regions of the world, its Deputy Managing Director, Muyiwa Akinyemi has announced.

Speaking during the flag-off of the 2022 Lagos International Trade Fair, on the theme: “Connecting Businesses, Creating Value” , Akinyemi said SMEs  are the bedrock of any country’s economic development.

He said that UBA pioneered products and services specifically targeted at SMEs and young entrepreneurs towards meeting their financial needs, having access to markets and building capacity.

“We are focused on creating value, connecting and facilitating business across Africa and between Africa with the rest of the world. Already, we have done a trade of about US$7.7 billion and Export trade of about US$29.4 billion as at August 2022,” he said.

“It will also interest you all to know that we match our words with action as we have supported hundreds of SMEs in Africa especially in countries where we have presence. UBA does this not only in the manufacturing and services sectors but also in the creative industry and Fintech,” he stated.

He also spoke on the Pan African Payment Settlement System (PAPSS), a centralised payment and settlement system for intra-African trade in goods and services that is poised to transform the payment landscape across Africa.

“Because of our large network and pan-African presence, UBA is working with AfrEXIM Bank through the African Continental Free Trade Agreement (AfCFTA) to promote regional trade through harmonised trade documentation, easier access to finance and timely and easy currency conversion with the PAPSS platform.

Already, UBA is at the forefront of this collaboration currently at six pilot countries in West Africa – Nigeria, Ghana, Sierra Leone, Guinea, Liberia and Gambia,” Akinyemi said.

Lagos State Governor, Babajide Sanwo-Olu, appreciated UBA’s efforts and support to SMEs which have significantly impacted the growth of businesses in Lagos and beyond.

Sanwo-Olu seized the opportunity to restate his administration’s commitment to prioritising the growth and development of Micro, Small and Medium Enterprises (MSMEs) to further drive the economic growth and development of the state.

The President, Lagos Chamber of Commerce and Industry (LCCI), Asiwaju Michael Olawale-Cole, expressed satisfaction on the level of SMEs’ participations in this year’s fair as he commended UBA for its commitment to the growth of SMEs.

Wema Bank Plc has once again demonstrated its unwavering commitment towards developing the capacity of SMEs in Nigeria to scale by launching the fourth edition of its SME Business School in Port Harcourt.

Designed to help build capacity for SMEs in the country, Wema Bank’s SME Business School was launched in Lagos in 2021. The second edition took place virtually, while the third edition happened in Abuja.

Now making its journey to the South-South geopolitical zone of the country, the initiative has helped to equip SMEs in various parts of the country with the business management knowledge and skills required to effectively run their enterprises and respond to the ever-evolving challenges of today’s business world.

 According to the Divisional Head, Retail Business at Wema Bank, Dotun Ifebogun, the Wema SME Business School was birthed in a bid to close the critical knowledge gap in the SME space in Nigeria, and each edition of the programme takes place in a different part of the country to ensure that SMEs all around the country participate and benefit.

 He mentioned that the 4th edition of the Wema SME Business School, which holds in Port Harcourt and starts on Monday, November 14, 2022, would impart contemporary business management skills and knowledge to growing businesses operating within the South-South region of the country. “We intend to make them champions and successful enterprises, thus supporting the economic growth of the country,” he said.

 He disclosed that the bank has collaborated with top-notch consultants from renowned organizations within and outside Nigeria, including Deloitte, Facebook (Meta), and Nexford University, to serve as facilitators on the programme and ensure that the participants get an immersive and invaluable learning experience.

 Dotun further noted that the initiative would be a meaningful addition to SMEs seeking to scale and strengthen their market positions.

 “As an SME-friendly bank, we understand that starting and running a business in Nigeria is no small feat, and there are lots of challenges that SMEs face. 

 “We started the Wema SME Business School to equip them with relevant and practical knowledge that will guide them in the effective running of their businesses and to surmount any challenges that they encounter.

 “Through this, we can tackle problems such as poor access to finance, poor market access, technological disruptions, and macroeconomic uncertainty. All in all, we will equip them with fresh ideas and insights that will help them to take their businesses to a higher level,” he said.

Baobab Microfinance Bank has said its commitment to funding Micro Small and Medium Enterprises (MSMEs) will be sustained, including the disbursement of over N5 billion monthly loans to over 5,000 customers.

Baobab Nigeria Managing Director and CEO  Kazeem Olarenwaju spoke when the bank, for the second year running, won the MSME Microfinance Bank of the Year at the 2022 Banking and Financial Institutions Awards (BAFI) in Lagos.

He said: “The increasing strong demand for our services by MSME in Nigeria is being rewarded as we have invested heavily in making access to loans easy for the customers. In achieving this, we are expanding our reach both offline and online to enable more businesses to benefit from our services.”

“Already we have the Baobab app which is doing a lot of wonders in the market enabling customers to do transactions seamlessly without actually coming to the bank. We also partner with some agency bank networks to render services to those in remote areas and this is going to continue in the years ahead, we are also opening more branch networks in Port-Harcourt, Aba, and Onitsha,” he said.

Kazeem noted that it had taken the visionary leadership of the Board and management of the bank and the dedication of the exceptional people, working across the organisation, to deliver the successes for which Baobab Nigeria is now being rewarded yearly at the BAFI awards. We are aware the expectation of the award is for us to do more, we are poised to unleash the potential of all willing entrepreneurs in Nigeria.

Baobab MFB Nigeria also won the Leading Microfinance Bank, Nigeria 2022 by Global Brands Magazine, London., West African brands Excellence Awards as Most Outstanding Micro Lending Service Brand of the year, Development Bank of Nigeria  Award as Highest Impact on the North-West Zone 2021, and  Highest MSME  Impact on the Youth MSME 2021.

The Lead Partner of Stransact Partners, Eben Joels, has advised auditors and audit firms to imbue the highest level of professionalism in discharging their duties.

He said credibility in the audit profession and ensuring adequate manpower that will cover the huge workload in the industry will promote efficiency of their operations.

Joels spoke during a press briefing in Lagos by Stransact Chartered Accountants, the correspondent firm of the RSM network, a large network of independent audit, tax and consulting firms worldwide.

Partners at Stransact (Chartered Accountants), the correspondent firm in Nigeria for the 6th largest international accounting firm -RSM, called for adherence to global standards and ethical practices in the conduct of audits in Nigeria. Addressing the media in a recent briefing, the accounting experts encouraged auditors in the country to follow a strict ethical approach in the conduct of their professional duties.

Auditors are professional accountants authorized to review and verify the accuracy of financial records and ensure that organizations comply with relevant laws and regulatory frameworks. Globally, strong ethics and credibility are crucial to the efficient conduct of audits since auditors are expected to be independent, reliable, honest, and carry out their duties without prejudice.

“Auditing is a reputation-based business. Without a credible reputation, an auditor cannot function efficiently. This is why an auditor signs financial statements with his name and not his firm”, said Eben Joels, General Partner at Stransact.

“The level of respect and trust you have in financial statements is directly proportional to the credibility of the auditor. Therefore, auditors should dispatch their jobs bearing in mind that their responsibility is not to make the client look good but to be accountable primarily to the client’s stakeholders that is- shareholders, investors, regulators, and employees,” he added.

The International Federation of Accountants (IFAC), has compiled the international Code of Ethics for Professional Accountants, which establishes the standard of behaviour expected of a professional accountant (PA). The fundamental principles within the code include integrity, objectivity, professional competence and due care, confidentiality and professional behaviour.

The three other partners at the firm buttressed the comments by the general partner.

Yomi Salawu, the Partner, People & Regulatory Services, emphasized on the importance of independence in the audit process.

“Integrity is a very important quality for an auditor but it is difficult to possess integrity without independence. Therefore, an auditor should not only profess to be independent but must also be seen as independent,” Mr Salawu said.

According to Bola Mogaji, Partner, Audit Services, “credibility is a watchword that should not only be maintained but must be perceived and seen in all the engagements of professional accountants. The absence of this important virtue has led to the continuous series of recent accounting scandals and audit failures that have undermined the credibility of auditing and auditors.”

Victor Athe, Partner, Tax Services, mentioned some of the factors that impact the credibility of an auditor, including objectivity, independence, integrity, professionalism, level of qualification, and trust.

“It must be noted that, if the ratio of the fee from a particular client to the total revenue of the auditing firm is too high, the firm’s independence will be questioned,” Mr Athe added.

The International Monetary Fund (IMF) has highlighted priority areas that policymakers in Sub-Saharan Africa (SSA) should focus on to boost economic growth in the medium to long term.

The advise came amid the global crisis and declining growth projections.

This was discussed during a webinar held on Monday themed ‘Living on the Edge: IMF outlook for sub-Saharan Africa’ hosted by the Institute for Security Studies (ISS) and the International Monetary Fund (IMF).

Head, Regional Studies Unit, IMF African Department, Luc Eyraud, said growth in the SSA region is expected to decline from 4.7 per cent in 2021 to 3.6 percent in 2022 which reflects the global economic slowdown, rise in global inflation and other crisis.

Regarding inflation and food insecurity, he said 80 per cent of countries in the region took measures mostly un-targeted and temporary in response to food and fuel price shocks adding half of the accelerated inflation is driven by food which represents 40 percent of the consumption basket.

“Nineteen out of the region’s 35 low-income countries are either in debt distress or have high risk of debt distress, also countries are now moving very close to the edge of buffers; the limited policy space with limited room to error and decisions must often strike a delicate balance between competing demands,” he said.

Highlighting four priority areas to strike a balance, Eyraud said policymakers must address food insecurity, consolidate public finances, manage the shift in monetary policies and accelerate sustainable and greener growth.

“Policies implemented in an emergency including un-targeted, costly and distortionary fiscal support measures should be gradually phased out, and countries need to strike a delicate balance in conducting monetary policy to address the rise in inflation and resist exchange rate pressures without undermining recovery,” he said.

Speaking on public finance, Eyraud noted the growing debt profile of countries in the region amid rising financing costs and advised that there is a need for countries to stabilize their debt below 70 percent of GDP.

“It is important to ensure effective and transparent public debt management while maintaining credible and clearly articulated medium-term fiscal frameworks, countries must consolidate public finance by boosting revenue mobilization, prioritizing and increasing the efficiency of public spending where possible,” he added.

Speaking on sustainable and greener growth, Eyraud said SSA accounts for two to three percent of global CO2 emissions yet needs $30 to $50 billion annually to finance climate adaptation hence international support will be critical to financing climate adaptation needed for resilient growth.

“High-quality growth will require investment in resilient green infrastructure to capitalize on the region’s sizable endowment of renewable energy resources leveraging private sector innovation, activity and finance,” he said.

In her remarks Cathy Pattillo, Deputy Director, IMF African Department said the region is experiencing significant problems ranging from high public debt to the impact of the concurrent crisis, and double-digit inflation among other issues, adding that solutions such as good political stability, supportive global environment and help form the international community which was employed in the late 1990s are no longer obtainable.

“The reality is that most countries are teeming with these imbalances and they’re going to have to live with them, and more countries are going to find themselves in a kind of grey zone and there’s going to be extreme uncertainty, as vulnerabilities and imbalances are going to stay high and it’s going to be difficult to calibrate,” she said.

Pattillo added that there are hopes that some countries are going to be more resistant than expected and can live in this grey zone for some time without taking risks.

She added that by 2050, SSA’s population is going to double however this can be utilized, adding that in the next 15 years, at least half of the new entrants to the global labour force are going to come from the region.

African Export-Import Bank (Afreximbank) is pleased to announce that it has signed a Memorandum of Understanding with the Bank of Industry (BOI) for the establishment of a Joint Project Preparation Facility (JPPF) that will provide early-stage project preparatory financing and technical support services to public and private sector entities operating in Nigeria.

Under the MoU, Afreximbank and BOI will mobilize resources to unlock investments into sectors such as energy, transport and logistics, ICT, special economic zones. industrial parks, solid minerals and services (healthcare, hospitality and tourism, and the creative economy).

The MoU, which was signed by Mrs. Oluranti Doherty, Director – Export Development, Afreximbank and Mr. Olukayode A. Pitan, Managing Director and Chief Executive Officer of BOI is intended to de-risk projects and attract critical private sector investments that will stimulate industrialization and spur value-added exports in the country.

The JPPF constitutes a direct response to complement Nigeria’s initiatives to address the twin challenges of the COVID-19 pandemic and existing macro-economic challenges associated with the country’s dependence on crude oil revenues, which account for 50 per cent of consolidated government revenues, 30 per cent of banking sector credit and 90 per cent of export earnings.

Executive Vice President -Intra-African Trade, Afreximbank,  Mrs. Kanayo Awani, commented: “We are quite pleased by this opportunity to, once again, partner with BOI in proffering a solution to one of the major challenges that have impeded the flow of investments that will boost Nigeria’s industrial development and export-oriented sectors. I am particularly pleased that Afreximbank and BOI are boldly venturing upstream to help investors develop well-structured projects that meet market standards.

“This intervention is timely as the JPPF will play a catalytic role in accelerating the diversification of the Nigerian economy by ensuring a steady flow of bankable projects in priority tradable sectors in a timely manner. In addition to enhancing bankability, the JPPF will, on a case-by-case basis, undertake feasibility studies to assess the viability of accessing markets in the sub-region, thereby promoting intra-African trade under the AfCFTA.”

Managing Director and Chief Executive Officer of BOI, Mr. Olukayode A. Pitan, commented: “In line with our commitment to driving Nigeria’s industrial transformation, we are delighted to commence this partnership which stands to achieve significant sustainable economic development in Nigeria.

Through this Memorandum of Understanding, we will harmonize efforts with Afreximbank for the promotion of trade and investment flows; undertake business development activities; and share project preparation pipelines in sectors of mutual interest. We will also be better-positioned to provide technical, financial and legal services that will culminate in the supply of bankable projects, while promoting and raising awareness of project preparation activities in Nigeria and Africa at large.

Our participation in the JPPF will therefore unlock development impacts such as quality jobs, FX generation and savings, and technology transfer.”

The Central Bank of Nigeria (CBN) and financial market dealers have itemised key steps they need to take to deepen  market liquidity and ensure easy settlement of transactions.

Speaking during the sixth Financial Markets conference last week in Lagos, Director, Financial Markets Department, Central Bank of Nigeria (CBN), Mrs. Angela Sere-Ejembi, explained that liquid markets have ability to convert any asset to cash or near cash measures in terms of Cost or Price,  depth or volume, resilience- orderly flow to correct imbalances.

Also important in market liquidity is the immediacy/ease of execution/settlement, stable bid and ask spreads.

Speaking on the theme: “Regulatory Framework and Effects on Liquid Markets”, she said money is the most liquid financial asset and is the live wire of any economy.

“The efficient flow from surplus to deficit promotes the smooth flow of transactions and eliminates the challenges of a barter economy. Central Banks’ must supply and maintain a level of liquidity consistent with sustainable growth,” she said. She said that regulatory guidelines safeguard the integrity of the market space and enhance market liquidity.

Sere-Ejembi, who was represented by Deputy Director, CBN, Mrs. Aderinola Shonekan, said failure to do so will render financial institutions incapable of performing their traditional intermediation functions, send wrong signals to economic agents and initiate a run on the banking system and ultimately distort economic growth.

However, she said a liquid market requires regulation sets out the requirements to operate within a certain market for prospective participants.

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“Regulation provides standards in a market and seeks to limit uncertainty, enhances resilience to shocks, effectiveness of  Fiscal and Monetary policy tools, improves stakeholders’ confidence and participation,” she said.

The absence of regulation usually results in a prevalence of informal and unethical practices of market participants, forgone growth opportunities when faced with an unstable financial system.

The CBN uses its monetary programme to monitor and manage banking system liquidity,  operates through the interbank money market to ensure financial system stability, adequate money supply and low inflation and supervises the domestic money market and provides financial and technical support to financial institutions.

Managing Director/CEO FSDH Merchant Bank Ltd, Mrs. Smith will speak on Risk Management as Effective Tools to Drive Liquidity and Transparency, said  liquidity is a company’s ability to raise cash when it needs it. She said the two main determinants of liquidity are ability to convert assets to cash, and debt servicing capacity.   “The process of making explicitly and openly available. In the context of the financial world, transparency is the extent to which investors and other stakeholders have ready access to required financial information about a company,” he said.

FMDA Chairman, Aig-Imoukhuede, spoke on “Impact of Monetary Policy Framework and Liquid Markets on The Economy. He said  the primary objective of monetary policy is price stability.

“The price stability goal is attained when the general price level in the domestic economy remains as low and stable as possible in order to foster sustainable economic growth,” he said.

According to him, instability in the general price level is undesirable as it brings about uncertainty and instability in the economy, thereby discouraging investment and hampering economic growth.

In his presentation, Bloomberg’s Head of Middle East and Africa Sellside & Electronic Trading Solutions. Mr. Femi Okulaja explained that ensuring financial stability would require achieving price stability and managing economic fluctuations, enhancing the capacity of the financial system to pool domestic savings and foreign capital and enabling efficient risk-sharing.

The welcome was given by FMDA President,  Bayo Adeyemo while  the Managing Director, Economic Associates, Ayo Teriba spoke  on National Economic Outlook and Essential Tools for Participation in Global Financial Markets.

The Managing Director, FBNQuest Funds, Mrs. Ijeoma Agboti, has advised corporations and other private middle-level operating companies  to carefully explore the capital financing opportunities available in the local financial markets.

She said equity and quasi-equity capital are important sources of financing for mid-cap companies seeking investment for their current operations and expansion initiatives, pointing out that equity capital can be helpful to businesses because business owners can sell shares to investors to finance expansion and growth without immediate obligation.

Mrs. Agboti, who spoke at a parley organised for representatives of financial media organisations in Lagos at the weekend, said the current economic headwinds facing mid-cap businesses place a demand on business leaders to carefully plan their capital needs with a view to optimising their portfolios and defensively  position their companies in these volatile period.

Quasi-equity, Agboti,  the FBNQuest chief, representing the investment banking and asset management business of FBN Holdings Plc said, encompasses various loan and convertible loan options for which repayment is linked to future cash flows, but often provide more flexible payment terms than traditional loans.

The interaction also included a presentation by FBNQuest’s Head, Equity Research Team, Tunde Abioye, who spoke on the prospects for Nigeria’s macroeconomy, highlighting the outlook for public debt, the exchange rate and inflation.

He acknowledged that businesses and investors now face difficult conditions, including mounting inflation and the exchange rate disparity, constrained disposable income, as well as growing pressure from the external sector. He said given the challenges on both the global and domestic fronts, it was essential for businesses and investors to have informed views on important macroeconomic variables “in order to minimise business risks and develop a long-term strategy to take advantage of opportunities as they arise.”

While Mrs. Agboti remained optimistic about enduring opportunities available to bolster capital structures to pursue and sustain strategic business prospects, she nevertheless warned that the outlook for the business environment remains uncertain over the next six months. Nonetheless, she averred, “a difficult economic environment provides a good opportunity to re-strategise and position for recovery,” adding that investors should sift through and identify attractive opportunities presented by quality issuers for possible engagement in raising funds to pursue available investment opportunities.

Abioye equally dwelt extensively on the World Economic Outlook, leveraging on the latest International Monetary Fund’s (IMF’s) report for October, that maintained its 3.2 per cent global growth forecast for Full-year 2022,  but cut its F/Y 2023 forecast by 30 basis points to 2.7 per cent.

He said the conditions could worsen significantly next year, as more than a third of the world’s economy is expected to contract in 2023, most especially for the Euro Area, where its growth expectation was slashed by -70bps to 0.5 per cent due to spillover effects from Russia’s war with Ukraine, high energy prices as well as soaring inflation across the region.

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In country, Abioye said GDP growth has remained in the low-single-digits (averaging. +2.9 per cent) over the past seven quarters, while Real GDP expanded by 3.54 per cent in Q2 2022, underpinned by +4.76 per cent growth in the non-oil sector (as against. 6.08 per cent Q1 2022).

He said Oil sector GDP contracted by -11.77 per cent y/y (vs -26.04 per cent in Q1 2022), stating that Oil’s formal share of GDP shrunk to 6.33 per cent from 6.63 per cent in Q1 2022

Abioye said the tertiary (services) sector posted the best performance with a growth of 6.7 per cent y/y after expanding by 7.45 per cent  in Q1 2022, while Primary sector (agriculture) growth was modest at 1.2 per cent, as against 3.16 per cent Q1 2022), and the secondary sector (industries) contracted by -2.3 per cent against -6.8 per cent recorded Q1 2022.

On revenues, the FBNQuest analyst said Federal Government of Nigeria’s (FGN’s)  aggregate revenue peaked at NGN4.2trn as at August  2022, or -33 per cent below the pro-rata budget benchmark, while oil revenue including NLNG dividends, amounted to a paltry NGN395billion, representing a shortfall of -73 per cent against budgetary provisions.

He said FGN’s revenue-to-GDP ratio of around three per cent was low even when viewed from an emerging market context, pointing out that the FGN’s actual revenue outturns have always fallen short of target due to the FGN’s aggressive revenue assumptions.

Abioye said the fiscal deficit was on track to exceed the three per cent expenditure ceiling outlined in the Fiscal Responsibility Act for the third consecutive year.

Income from cryptocurrencies and  non-fungible tokens (NFTs) is expected to cross $70 billion by 2025, despite the challenges posed by the COVID-19 pandemic, a financial report has said.

CryptoMonday.de report said that while the world grappled with the downsides of the COVID-19 pandemic, the crypto space registered unprecedented booms, NFTs in particular registered a meteoric rise in their adoption in 2021.

Available data points to NFTs continuing to contribute a small percentage of the crypto sector’s revenues.

The NFTs are cryptographic assets on a blockchain with unique identification codes and metadata that distinguish them from each other. Unlike cryptocurrencies, they cannot be traded or exchanged at equivalency.

The report said it has been analysing trends within the crypto space and projected that income from crypto and NFT marketplaces will surpass the $70 billion mark by 2025.

The crypto sector could be niching, alright, but there’s no denying that it is handling colossal sums of money.

Opimas study  indicates that NFT marketplaces and crypto exchanges generate more revenue than traditional venerated stock exchanges.

Opimas suggests that exchanges like Binance and Coinbase and NFT platforms, including OpenSea and Rarible, earned up to $3 million daily in 2021.

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“Most of the crypto generating these earnings comes from very few wallets. That’s because the crypto space is a high-stakes and very volatile one. These exchanges and marketplaces derive a significant portion of their revenues from fees. They include transaction, listing, and conversion fees. Listing fees could earn the platforms huge sums as they could go as high as $15 million a token,” it said.

Also, Binance Labs, the venture capital and incubation arm of Binance, announces the closing of a new $500 million investment fund. The fund is supported by leading global institutional investors such as DST Global Partners, Breyer Capital, and Whampoa Group. Other major private equity funds, family offices, and corporations also subscribed to the fund as limited partners.

 

The new fund will invest in projects that can extend the use cases of cryptocurrencies and drive the adoption of Web3 and blockchain technologies.

 

Founder and CEO of Binance, Changpeng Zhao ‘CZ’ said: “In a Web3 environment, the connection between values, people, and economies is essential, and if these three elements come together to build an ecosystem, that will accelerate the mass adoption of the blockchain technology and crypto. The goal of the newly closed investment fund is to discover and support projects and founders with the potential to build and to lead Web3 across DeFi, NFTs, gaming, Metaverse, social, and more.”

Furthermore, the sector will need to grow at a compound annual growth rate (CAGR) of 21 per cent from 2022 to 2025.

That way, NFT revenues will jump to $6.9 billion, nearly a tenth of all crypto trading income.

“The difference in NFT CAGR and their portion of the crypto revenue will possibly impact user adoption,” said CryptoMonday’s CEO Jonathan Merry.

He continued, “Market data indicates that crypto adoption will grow at 4.5 per cent , whereas NFT adoption will do so at one per cent. This relatively low percentage could be pointing to a niching of the crypto trade for a long while.”

The World Bank Group has advised countries to invest an average of 1.4 per cent of Gross Domestic Product (GDP) annually to reduce emissions.

Such investment, the bank said, could  reduce emissions by 70 per cent by 2050 and boost resilience.

The analysis,  climate and development: An Agenda for Action,  compiles and harmonizes results from the Bank Group’s  Country Climate and Development Reports, covering over 20 countries that account for 34 per cent of the world’s greenhouse gas (GHG) emissions.

It shows that investment needs are markedly higher in lower-income countries which are more vulnerable to climate risk, often exceeding five per cent of Gross Domestic Product (GDP).

The World Bank said the  countries will need increased amounts of concessional finance and grants to manage climate change impacts and develop along a low-carbon path.

The report draws from the richness of the individual country reports and highlights lessons for countries on integrating climate and development objectives.

It finds that this approach to climate action can help them manage the negative impacts of climate change, while generating positive impacts on GDP and economic growth, and delivering critical development outcomes such as reducing poverty. The key conditions for success include impactful reforms, improved allocation of public resources, higher mobilization of private capital, and significant financial support from the international community.

“Achieving climate and development objectives must go hand in hand. Climate action is a key global public good, requiring significant new financing from the global community and mechanisms for inflows,” said World Bank Group President David Malpass. “Well prioritized and sequenced climate actions, strong participation of the private sector, substantial international support and a just transition are critical components for impact.”

The report also notes that while all countries have to increase their climate action, high income countries with their greater responsibility for emissions need to lead the way with deeper and more rapid decarbonization, as well as increased financial support to lower income countries. Major current and future emitters in the developing world also have a key role to play for the world to achieve the goals of the Paris Agreement. The report also examines the technologies and innovations needed for lower carbon intensity production of electricity, steel, cement, and manufacturing, and how the world will build green and efficient supply chains for a sustainable future.

Countries need to prioritize and sequence key investments and policy reforms, according to the report. These will deliver multiple benefits. And emission reductions can deliver immediate development outcomes such as reduced vulnerability to fossil fuel price volatility, improved trade balances and enhanced energy security, and better air quality and related positive health impacts. Early action can also avoid locking countries into high emitting infrastructure and systems, which will be costly or even impossible to transform in the future.